German supermarket chain Kaufland buys Melbourne site

A German supermarket giant has snapped up an empty Bunnings site in Melbourne as it prepares to break into Australia’s lucrative $90 billion grocery market.

Kaufland, a warehouse style supermarket, boasts superstores five times bigger than Coles or Woolworths and is similar to Costco but without the membership.

The chain, which stocks about 60,000 products, has already bought a site in the outskirts of Adelaide for $25 million as part of its plans to dominate the sector.

German supermarket Kaufland (pictured) is opening their doors for the first time in Australia

The supermarket giant has snapped up an empty Bunnings site (pictured) in Melbourne as it prepares to break into Australia’s lucrative $90 billion grocery market

The German Giant is known for offering shoppers everything from groceries to car maintenance supplies and will be opening its doors in Melbourne and Adelaide

The new stores will reportedly cover 20,000 square metres, just under five acres, and will stock everything from chocolate, televisions and ladders.

Kaufland, which is part of the Schwarz Group which owns Lidl, has never opened in an English speaking country but is extremely popular in eastern and central Europe countries with more than 1230 stores.

Unlike German supermarket Aldi, who mainly stocks their own brands, Kaufland stocks thousands of household brands.

Initial reports suggest Kaufland would need to open about 20 stores in Australia to make a viable investment.

The new stores will reportedly cover 20,000 square metres and will stock everything from chocolate, televisions and ladders.

Kaufland, a warehouse style supermarket, is five times bigger than Coles or Woolworths and is similar to Costco but without the membership (stock image)

Kaufland (pictured) will enter supermarket market alongside key player Coles and is extremely popular within eastern and central Europe

Retail consultant Brian Walker told the Herald Sun he expected Kaufland to be ‘very aggressive’ with its pricing scheme when it launched in Australia.

‘They are going to go hard and fast — they make their money by volume and they’ve got to get scale,’ he told the publication.

‘They will be very aggressive on price, very aggressive on product and they are going to appeal to that Aldi, Costco buyer.’

As the company is buying land, rather than leasing the land, it means Australian stores will not open for at least a couple of years, Fairfax Media reported earlier this year.

The German giants reportedly looked at other cities across the country including Geelong and the Gold Coast, but it is believed Sydney is not an option for Kaufland stores because there is not enough available land space.